ONTARIO COALITION FOR LAB REFORM OPPOSES MEGA-LAB DEAL

(Toronto, ON – July 15, 2013) The proposed $1.2 billion takeover by LifeLabs of CML will turn Ontario’s two largest medical laboratory companies into a controlling “mega-lab” harmful to healthcare and should be blocked in the public interest, a new Coalition of concerned organizations told the Ontario government today.

“Too many of our sick and seniors already have to go too far or wait far too long for lab services like blood tests,” said Gerard Kennedy, spokesperson for the Ontario Coalition for Lab Reform (OCLR) and CEO of Alpha Healthcare/Alpha Laboratories, Ontario’s 4th largest community medical laboratory. “Ontarian’s need to know that the Mega-Lab will further dilute the quality and availability of their test services.”

“It is no coincidence that this deal comes now just when the government was in the midst of addressing the situation,” Kennedy added, referring to a months-long government lab system reform process. “This is a bold attempt to pre-empt government’s decision making, and a grab for big corporate control over the most common medical procedure for Ontarian’s.”

Some 75% of all medical decisions are made based on laboratory results. The OCLR, a group of smaller owner operated medical laboratories, non-profit organizations, individual doctors, and allied services also released a public brief for Health Minister Deb Mathews. The group is calling on the government to reject the takeover and hold public hearings to permit the implications for patients of the Mega-Lab and alternatives the coalition is proposing to be fully understood. The Coalition is also asking the Competition Bureau of Canada to intervene.

“The Mega-Lab would have nearly two thirds (62 per cent) of all Ontario out-patient testing. This is the same as if Rogers were to be allowed to take over Bell or Telus in the cellphone market,” said Asif Malik, an 18-year veteran of community medical lab work and general manager of Bio-Test Laboratory, a local Ottawa operation. “The critical difference is that these are medically necessary lab tests , not cell phones. It is patients who will suffer the lower service and quality and taxpayers who will pay the higher prices.” At least 40 additional Ontario communities will lose competitive status if the takeover proceeds.

According to the Coalition, the $1.22 billion deal is highly overpriced and will end up costing taxpayers $120-170 million more than necessary annually, paid either in higher prices or reductions in service quality. To achieve the published profit goals of the prospective new owners, the OCLR estimates 25-30 per cent of the roughly 4,500 health care professionals now working for the two companies in roles such as lab technologists and specimen collection staff will inevitably lose their jobs.

The Coalition predicts the resulting Mega-Lab will use its dominant position to dictate prices, terms and conditions for service in Ontario far into the future. The Coalition is promoting an alternative that would lessen, not increase the control of large corporate labs and broaden choice for patients and doctors, while lowering prices for the government.

“Healthcare decisions about quality and access for patients need to be made out in the open, not behind closed boardroom doors,” said Kris Bailey, CEO of non-profit In-Common Laboratories and an international lab expert who has worked for both public and private sector medical laboratories. “We believe private companies have to accept much greater responsibilities than their own self interest when providing essential health services.”

About the Ontario Coalition for Lab Reform

Formed to promote the need for reform in Ontario’s medical laboratory services system, the Ontario Coalition for Lab Reform is a group of owner operated medical laboratories, non-profit organizations, doctors, allied services and lab technologists who believe that fair competition is critical to delivering better patient services and better taxpayer value. The Coalition is united in its stance against the creation of a Mega-Lab in Ontario, believing that private gain should not be permitted to come at the expense of the public good.

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Additional quotes:

“Big corporate labs already hurt patients,” says Akron Clinic owner, pharmacist and onetime laboratory operator John Dacyshyn. “Here in south Etobicoke, CML abandoned the lab in 2010 that had been in our building since the beginning just to increase their profits, and then also closed the only other outlet in the area, leaving many patients unable to get their testing done.”

We have been forced by big labs to create a charity-style service to ensure our patients can get the medical lab tests they need,” says Dacyshyn. “The doctors employ a staff person to take specimens, we help cover shortfalls and give free space, and one of the smaller labs does the pickup and testing without compensation from government. We have to turn away anyone from the outside. The system is already close to broken; this huge lab takeover will make it much worse.”

“This takeover – and the inevitable service cuts that will follow – is bad news for seniors and persons with disabilities or chronic conditions who need mobile services because they are in long-term care facilities or seniors residences,” says Cheryl Kerr, president of Medex, a small business that offers personalized specimen collection service in east GTA and Niagara. “Many residents already have to pay out of their own pocket to get tested and Life Labs just notified them those charges are going up by 50%.

If big labs dictate prices, times and collection quotas for patients now, how much worse will it be if they are allowed to double in size?”